Kumar, a partner and leader of the banking and capital markets practice at PwC, will take charge next month and build a 2,500-strong team. Her appointment has to be approved by the Reserve Bank of India. Sharma — whose digital payments and commerce company Paytm counts Alibaba as an investor — is one of the 11 individuals and entities approved by RBI to set up payments banks, entities which can offer remittances and deposits but not loans. The payment bank is expected to launch operations in the second half of 2016. Paytm and Kumar did not reply to queries from ET.

Kumar, who holds a graduate degree in public policy, had a 16-year stint at RBI, where she handled foreign direct investments, trade payments and oversaw operations of foreign banks. Her LinkedIn profile says she was also a senior vice president at Bank of America Merrill Lynch between December 2007 and August 2010 overseeing compliance for India.

Paytm has also hired Saurabh Sharma, a former Airtel executive, to head merchant and agent acquisition for the new bank that has not yet been named. Vikas Purohit, who was formerly with Amazon India, has been tasked with leading banking operations.

Payment banks can accept demand deposits and savings bank deposits from individuals and small businesses, up to a maximum of Rs 1 lakh per account. Non-resident Indians cannot bank with these ventures, which also cannot disburse loans. However, they can sell mutual funds, insurance and pension products as well as facilitate payments and remittances with a focus on the unbanked segment like migrant workers. The "in-principle" approvals granted last year are valid for a period of 18 months, with promoters expected to own 51% of the stake in the new bank.

Paytm's Sharma told ETin an earlier interview that he would "raise a mixture of debt and equity" to fund his payment bank operations. Amongst the options he has is to dilute a portion of his stake in holding company One97 Communication, which owns Paytm.